One neat trick to end extreme poverty
economist.com
economist.com
> poverty is now concentrated in places where growth is harder to achieve, and population size is rising fast. Around seven in ten of the world’s poor are in sub-Saharan Africa; the Democratic Republic of Congo, Ethiopia and Nigeria alone account for a quarter of the total. If current poverty rates persist, rapid population growth means that these three could be home to more than two-fifths of the world’s poorest by 2050.
The world permanently funding cash handouts in highly corrupt countries sounds like a terrible idea.
Sounds much better to investing in infrastructure and improved governance to make the growing issues in sub-Saharan Africa more like the success stories in Asia and other parts of Africa.
Harder to steal infrastructure. But obviously still possible especially before and during construction, and after during maintenance contracts.
When I think of funding Africa, I think of Andrew Millison's video blogs about building a green belt.
Everyone is looking for a simple solution, but simple solutions don't take into account human social dynamics.
They're going to replace USAID in the poorest nations, offer more free Chinese education.
In time they'll unseat English as the global language.
The best colleges, by some metrics are already Chinese. Give a few hundred thousand Africans tier 1 free Chinese education and see how global perspectives shift in a few decades.
Next the Yuan will become the world reserve currency.
Edit: Sources are always better than opinions.
https://globalchinapulse.net/confucius-institutes-and-the-sp...
Someone will fill in the gap.
Free college in Chinese seems like a great deal vs paying over 100k for Western college.
We've not just thrown it away, but but set fire to it so that if it ever is possible to wrest control away from these vandals, it could take generations to repair.
Likewise, there's plenty about China to be wary of, but the way that they have collectively invested in the country to move it from a backwater to a premiere superpower (without the shortcut that WWII gave the US), must be recognized as a triumph.
We could be living in prosperity for all, but no, we have to argue over pronouns and bathrooms. FFS, we can do better than that!
The data strongly suggest otherwise.
English’s dominance is growing, with over 80% of online content in English.
There are 1.5 billion English speakers vs 1.1 billion Mandarin speakers. In third place is Hindi at 600 million, followed by Spanish at 560 million and French at 280 million.
86% of Mandarin speakers are native speakers while only 25% of English speakers are native speakers. The ratio for Mandarin has been holding steady while for English more and more non-native speakers are learning it.
Not only is Mandarin mostly spoken by native speakers as the ratios above illustrate, the Chinese birth rate is dropping.
So no, not only is English the world’s true lingua franca, it is extending its lead.
A smart African student might decide to learn Chinese as well as English.
A smart Chinese student may learn English, French among others.
We'll see what happens in the next 30 years.
Here in Tanzania they are building a rail line across the country. That will reduce the travel time by half. Near Mwanza they built a large bridge crossing a bay that replaces an unreliable ferry service. (whenever the ferry was down, people used small boats which occasionally capsized and killed people)
Rural areas need better access to water, and even in cities many people still don't have water on tap. Electricity is mostly there but often breaks down. I brought a desktop computer with me and I am afraid to run it because it would crash to often. In Uganda we once had to wait three days until electricity came back.
Education could use a lot of improvement. There are usually 50 kids or more per class. Corporal punishment is still being used, and although there is ambition to teach modern subjects (including IT, programming, etc) schools lack the resources and the teachers, especially in rural areas, but also in cities. Private schools are not much better than public schools.
The real question is how to get the investments into the country. I just learned that Kenya is seeking funding to complete their rail line. There is your investment opportunity.
On a smaller scale, you can fund schools. Or hire local developers. (Contact me if you are interested in that. I collaborate with local developers on software projects and I volunteer teaching IT/programming in schools. Your support would be appreciated.)
It's how much of international politics works. Paying off governments is a good way to get what you want.
McGillivray, F., & Smith, A. (2008). Punishing the prince: a theory of interstate relations, political institutions, and leader change. Princeton University Press.
>it would cost $318bn a year to reduce the global poverty rate to 1% at the $2.15-a-day line—roughly 0.3% of global GDP— with imperfect, real-world information.
>around 60% of rich-world respondents say they would be willing to give up 0.5% of their income if that were enough to end extreme poverty.
While in reality I'm sure this would be much harder than the article suggests, I buy the direction of the key points:
1) it costs a feasible amount, 2) there is strong support to do it. 3) creative approaches might be effective.
Note: I kept the title I found in the print Economist version, since it is more informative.
But also we need to do more for ending poverty!
which focus on providing folks with the means to raise their own food and be self-sufficient are the key.
It’s not even that malicious, bureaucracy takes over and more money is spent on the middle men than the recipients. In the US we already spend about $600B in charitable giving, yet most of the problems still remain.
Even if you fix the distributional challenge, the second order effects of how the modern economy is setup ensure that extreme poverty will always exist. If the poverty line is $10k and you give every single person $10k, the corporations and rent seekers will adjust the cost of living so that the new poverty line is now $20K and extreme poverty still exists.
In Africa it is quite common to kill foreign aid workers in order to deny food aid to the enemy. Bureaucracy and rent-seeking has nothing to do with it, it's just child soldiers being brainwashed to kill their enemies at any price.
And hunger isn’t that uncommon in the US, where a extreme poverty rate is still 4-5% of the population.
Where in Africa is this common?
That's bad, but it doesn't seem incredibly common.
The rest of africa looks to be pretty tame by comparison.
The number of killed is 12 according to this report. I should also mention the fact that these aren't killing "foreign aid workers in order to deny food aid to the enemy". Instead the report calls out just general crime being the primary reason for the deaths.
> Nigeria saw a significant increase in all victim types (killed, injured, kidnapped) from 2023 to 2024, with fatalities up to 12 from just 2 the previous year. Ongoing insurgency and criminal activity made road ambushes the most common attack location, with small arms fire and assaults both rising as types of violence. More kidnappings and violent robberies occurred at personal residences across several regions than in previous years, highlighting the increasing risks of targeted attacks.
I've checked it when giving funds to new charities.
Oxfam, for example, are quite inefficient - https://register-of-charities.charitycommission.gov.uk/en/ch...
If so much of the problems of aid delivery are due to failed, corrupt states, could we be better served by using some of the foreign aid spend to install and maintain governments that at least aren't an impediment to aid delivery?
Yes, this would be a neocolonial programme, but one done with slightly less blatantly self-serving intentions than the previous generation of "civilization is mysteriously completely coupled with letting the home country raid your natural resources."
But there's also meta-question: assume we're given all the logistical support we need. Are we even delivering the right kind of aid? Aid programmes are often sold to the donor countries as a convenient sink for their agricultural overproduction or scrap merchandise as much as anything else, and meanwhile the locals are begging for tooling to pull themselves up the value chain and increase self-sufficiency rather than just bags of rice and unwanted T-shirts that leave them dependent again in a few months.
If they really were, they already be doing it, and it would be a solved issue. For many folks, it's a lot easier to say 'yes' to a survey about whether you would give your own money to the poor than it is to actually give your own money the poor.
There seems to be some kind of international target of 0.7% of GNI (~GDP) for developmental aid already, which governments often don't meet fully but come close to (e.g. https://commonslibrary.parliament.uk/research-briefings/sn03...), so the 0.5% would probably be viable in tax form.
That really is sad. We're talking 0.5% and only 60% were okay with that?
Some people also think that we should spend that money on other stuff that they’re interested in like cool space stuff and just don’t care about poor people and never will.
Poverty is a relative concept. Even among billionaires, there are poor billionaires that would find it painful to give up any part of what they have.
Mind you, they still think poverty is bad, but they'd object to something like paying for basic infrastructure and be happy to create the modern-day equivalent of CCC camps to pay the poor people to build that infrastructure. That sort of thing.
No. The median American household net worth is $193k, and of that, $8k in checkings/savings accounts. 54% of adults have cash savings that can pay for 3 months of expenses (this excludes non-cash savings, and obviously an even greater percentage have cash savings that would cover 1-2 months of expenses, which is still not paycheck-to-paycheck).
- Median net worth is $193k, of which $185k is in their home. Suppose a $10k emergency crops up. Well...you're fucked. If you're lucky you can take out a loan against the accrued value relatively quickly, but otherwise you're taking a 10% haircut having to sell quickly, another 10% in transaction fees, and another $10k in the sudden move/storage/renting/loss-of-work/etc situation you found yourself in liquidating your home to cover an extortionist colonoscopy+lawyer pricing or something. You're _fine_, but when minor road bumps can cause $45k setbacks ($55k if we count the $10k expense this depended on) you're not not living paycheck to paycheck.
- You can't compare the median savings to the median net worth. They're not the same person, and the cross-terms can take almost any distribution.
- The 54% stat is based on self-reported vibes and is pretty blatantly wrong. The median household also has $5200 in unavoidable (without delinquency, losing your home, etc) expenses, which doesn't jive very well with $8k in savings somehow lasting 3 months (assuming the cross terms I complained about aren't too terribly distributed). You would expect 2+ paychecks of stability (which, incidentally, is also the usual prompt for "paycheck-to-paycheck" stability -- not whether it takes one paycheck to be screwed but two), but then you're hosed.
And so on.
You're _right_; the median US household won't go broke missing a paycheck; but 2-3 paychecks is enough to cause major problems at the 50th percentile, give or take friends and family stepping in to soften the blow.
Based on stats from IFAD [1]:
> There are some 500 million smallholder farms worldwide; more than 2 billion people depend on them for their livelihoods. These small farms produce about 80 per cent of the food consumed in Asia and sub-Saharan Africa.
Estimates are hard to come by, but a significant fraction of those (>750 million) are subsistence farmers with zero market access beyond their nearest village or town. That not only means thy can’t effectively sell their produce but they can’t easily afford or have access to basic technologies and resources to improve their yields enough to get out of subsistence farming. Even metal tools are difficult to come by in many places, let alone a consistent supply of fertilizer.
Mobile phones have had an outsized impact on these communities because they allowed farmers to get market data even if it was just a village away. Roads, irrigation, sanitation, and a whole host of other infrastructure we take for granted would have an even bigger impact, and these aren’t temporary solutions like food aid, which just distorts markts even further.
That said, there are huge long standing systemic problems (some violent) that make these kinds of investments hard to justify politically and create a nasty chicken-and-egg problem.
[1] https://www.ifad.org/documents/d/new-ifad.org/smallholders-c...
> The 189 member states of the United Nations set a target to bring the share of people living on less than $1.25 a day to half its 1990 level by 2015 ... Economic growth did nearly all the work. A booming China accounted for about two-thirds of the decline
That's one way to put it. Another way is that China set out to intentionally raise 800M people out of extreme poverty as a decades-long, multi-faceted priority and policy goal of the CCP. According to the World Bank [1]:
> China’s approach to poverty reduction has been based on two pillars, according to the report. The first was broad-based economic transformation to open new economic opportunities and raise average incomes. The second was the recognition that targeted support was needed to alleviate persistent poverty; support was initially provided to areas disadvantaged by geography and the lack of opportunities and later to individual households. The report points to a number of lessons for other countries from China’s experience, including the importance of a focus on education, an outward orientation, sustained public investments in infrastructure, and structural policies supportive of competition.
Or, as The Economist put it, "economic growth". None of this is new. Another oft-cited example is Brazil's Bolsa Familia [2].
Back to The Economist:
> None of this is insurmountable, though. As Alfred Marshall, a founding figure of modern economics, once observed, eradicating poverty is less a quandary for economics than for the “moral and political capabilities of human nature”.
That's so weird. We apparently can't blame income and wealth inequality on economics. No, it's a moral and political failure.
[1]: https://www.worldbank.org/en/news/press-release/2022/04/01/l...
[2]: https://www.worldbank.org/en/news/feature/2010/05/27/br-bols...
A couple of trillionaires could probably fund most of it. People like Bill Gates actually have done quite a bit on this front, which whatever else you think of the man is quite admirable.
However, just giving people money or food isn't a long term solution. Empowering people to earn a living and grow or buy food is a much more structural fix. Mostly it boils down to ending local conflicts and wars. In the eighties, Live Aid was a big campaign against hunger in places like Ethiopia. It's doing somewhat better these days. But it still has a lot of conflict. But, it also has economic growth and that has slowly been pulling people out of poverty there.
Another fix is restoring land. There's a big project to stop the Sahara from expanding further south that involves a green wall. It's a successful project where people dig simple U shaped trenches to capture rain water. Instead of flooding away with top soil, the water now stays and turns land back into usable farm land. This project has been running for a few years. The local population seems to get it and is now enthusiastically implementing it all over the place. They can grow food, sell it on local markets, and graze their live stock. The Sahel is also a region where poverty has fueled a lot of conflict over land and resources. So, it's a double success in the sens that it takes away some of the root causes for that kind of conflict.
This is a feature, not a bug. Making payments to those that don't need in exchange for support for those in power is a function of many governments.
De Mesquita, B. B., & Smith, A. (2011). The dictator's handbook: why bad behavior is almost always good politics. Hachette UK.
In societies where they are effectively slaves (and breeders), they are not part of the economy and therefore cannot add to it.
And then there's just the humanitarian part of it too...
https://unfoundation.org/blog/post/3-essential-issues-to-empower-women-and-end-poverty/
https://caribbean.unfpa.org/en/news/empower-rural-women-%E2%80%93-end-hunger-and-poverty-1
https://pmc.ncbi.nlm.nih.gov/articles/PMC8293807/Either way, only education can change things. Both men and women (boys and girls) need to be educated about better ways and how to cooperate to provide for their families together.
Anyone who disagrees should consider why you’re on a venture capitalist website.
> Anyone who disagrees should consider why you’re on a venture capitalist website.
Not limiting yourself to an ideological bubble is actually a good thing, regardless of what website you're on.
I didn't know that "giving capital and opportunity" to people is inherent to capitalism. My understanding of capitalism is, that if people have money, they can "use their own money to further their own life", but capitalists avoid giving money to other people unless the return on investment is greater than 1.
I spoke to a local director of a mineral mine in Tanzania. He told me that all of the profits of the mine go to the chinese owners who invested into the mine. That's capitalism at work. The corruption here is (if any) that local officials who brokered the deal allowed this deal to go through without making sure that at least some of the profits remain in the country. It is not even clear that corruption is the cause here. It may well be that the investors simply demanded that much and the locals thought that that would be the best they could get.
In my opinion most of the profits from mining should remain in the country. Those minerals are Tanzanias wealth, that they should use to build up their own country. But capitalism demands that investors make as much profit as possible, disregarding side benefits. So no, capitalism is not the answer.
By now, various forms of large-scale welfare are over 100 years old, so we have a lot of collective experience in what works and what doesn't as much.
It seems that there is a big difference between attacking extreme poverty in severely underdeveloped places, which was often quite successful and resulted in economic development, and attacking "standard" poverty of the lowest decile of the population in developed countries, which seems a lot less tractable.
My working theory is that in extremely underdeveloped places, most of the population is quite capable of productive work and building a competitive economy, but lacks the know-how, institutions, stability and means to do so. If provided with those, they can kick-start their own future.
While in the developed countries, the permanently impoverished subset are the people who, for all sorts of reasons, cannot do the same regardless of the means invested into them.
It is quite sobering to know that the most generous social system in the world, in France, spends about a third of the national GDP on social spending, and still has some really bad banlieues and very persistent class conflict. If a third of GDP of a developed country cannot do the job, the problem isn't in the raw amount of money spent, but somewhere else.